Cruise Travel Insurance FAQ

| March 07, 2008

This article doesn't have any sexy pictures, but it is chock-full of great information about cruise and travel insurance -- even "cancel for any reason."

When it comes to travel insurance, there are three kinds of consumers: Those who buy it because it gives them a warm and fuzzy protected feeling; those who buy it because they know it is the smart thing to do; and those who feel like they are throwing away money on a wager that something horrible is going to happen.

Admittedly, people in the third category (like me), with a head-in-the-sand mentality, don't want to think about having a tragic accident or illness overseas. Not only would we lose our vacation investment, but we would have to pay all medical and related expenses out of our own pocket. So, for people like me, here is what we need to know about travel insurance.

What Does Cruise Insurance Cover? Many people ask us if they really need cruise insurance. Our former editor used to ask if their medical insurance covers them in Panama, because that's where you are, legally, if your cruise ship is registered there, as so many are. In case you didn't know, most U.S.-based health insurance policies, including Medicare, will not cover you outside the U.S., and contrary to what many people believe, or probably never really thought about, treatments by the doctor or nurse in the medical facilities onboard ships are not included in your cruise fare. The charge will appear on your final statement of cruise charges. I have received letters from people who had no idea they were being charged and received bills in the $1000s of dollars. This is unusual, but can happen. Typically, a doctor visit is about $40, but any special procedures they need to do are billed seperately. The exception is if the visit is related to a shipboard accident, or norovirus. The cruise line will usually take responsibility in those cases.

Travel insurance, when needed, can be a lifesaver, and a life savings saver. So only the very healthy or the very wealthy should travel without it. Illness, medical emergencies, severe weather, delayed flights and lost passports or luggage are all possible financial drains for which insurance companies will reimburse you. More importantly, such troubles could force you to cancel your trip. So besides racking up unexpected costs, you could lose your entire vacation investment. And most importantly, they cover medical emergencies and illnesses that are not only frighteningly expensive, but very difficult to manage when you are away from home.

Ah, But Here's the Rub Even though travel insurance covers most of the things mentioned above, you can't expect the insurance provider to baby-sit you if something happens to your luggage or a flight is canceled. For the most part, you will have to manage the problem yourself and then provide proof to your insurance company to be reimbursed later. Luggage is not even considered missing until after six hours. The insurance companies provide 24-hour phone assistance, but they won't make new flight reservations for you or give you a line of credit at the local "Gap for Men" unless you pay extra for concierge services.

The one exception. logically and necessarily, is medical evacuation. The companies that offer this option will usually pay up front for it (check your policy to verify this) because pre-payment is required by the companies who provide medical evacuation.

What if you miss the boat? One thing cruise line insurance policies have started offering lately is called "catch-up" insurance. If your plane arrives late and you miss your ship, they will fly you to the next port city. A lot of people are under the impression that if you book your air through the cruise line they are automatically responsible to get you to the ship if your flight is late. Not true. They are only responsible if you bought their cruise insurance. Or, if you buy a third-party insurance policy almost all of them now also offer catchup insurance.

(wondering where the sexy picture is?)

When Insurance is Definitely Worth the Price Your health is your responsibility while traveling. Travel insurance is most beneficial when there is a medical emergency that interrupts your trip. Not only will it pay your medical expenses if you have an emergency overseas, but in many cases it will also pay the exorbitant fees of evacuating you to the nearest "best care facility" and from there back to the United States, with an additonal policy. When this involves helicopters, traveling nurses and companions, specially equipped jets and foreign hospital facilities, it can cost a fortune.

Peter Evans, Executive Vice President of InsureMyTrip.com tells me that medical evacuation, along with pre-existing conditions, are the areas where consumers really need to do their homework. While missing a trip because you get sick before you leave might cost you $10,000, a medical emergency during your trip might cost you well over $100,000. Pre-existing condition coverage varies, more on that below, but Peter recommends that everyone should have a policy that includes medical evacuation of at least $100,000, and more if you are going to Africa, China, Russia, or the like.

Comparing Insurance Providers When you start shopping for coverage, the simplest option is to get the policy offered by your cruise line when you make the initial deposit on your cruise. But it isn't always (or even usually) the best option, depending on your individual needs. As an alternative, there are several excellent third party providers who sell policies directly to the public or through cruise travel agents. The two biggest are Travel Guard (www.travelguard.com) and CSA csatravelprotection.com/), though there are dozens more.

If you buy insurance from the cruise line, do not assume it will automatically reimburse you just because you change your mind about going on the cruise. Reimbursements are given only if there is a medical reason for canceling, or another emergency, such as the death (or a serious accident) of a close family member. And don't expect them to take your word for it: You will have to make a claim, and if it is judged legitimate, a settlement amount will be determined by the line. If you have any doubts about whether an incident will be covered, call the company before you cancel your cruise if you can. Another thing cruise line policies will not cover is provider default, meaning if the cruise line itself goes bankrupt they will not reimburse you. However,a third party insurance provider usually will.

Are there policies that allow you to just "change your mind" and decide not to go. Yes, there are a few, but more on that later.

How much Does Insurance Cost? For an example of typical coverage, let's consider one of the larger providers, CSA, using a one-week Caribbean cruise policy for two people aged 52. The cost came out to $159.19 (or $79.09 apiece), and it provides the following protection:

  • Trip Cancellation (100% of Trip Cost):   up to $2,000.00
  • Trip Interruption (150% of Trip Cost):   up to $3,000.00
  • Trip Delay ($150 per Day):   up to $2,000.00
  • Baggage and Personal Effects:   up to $2,000.00
  • Baggage Delay:   up to $400.00
  • Accident & Sickness Medical Expense ($750 dental expense limit applies):   up to $50,000.00
  • Emergency Assistance (Emergency Medical Transportation):   up to $250,000.00
  • Collision Damage Waiver (Not available to residents of OR or TX):   up to $25,000.00
  • Air Flight Accident (AD&D - Flight Only):   up to $200,000.00*

Note: they don't really say what AD&D for Air Flight Accident stands for, but my guess is "accidental death and dismemberment".

Or they offer an enhanced policy (oddly called "Freestyle Luxe") which provides higher protection in the the following areas for $120 per person:

  • Baggage Delay:   up to $1000.00
  • Accident & Sickness Medical Expense ($750 dental expense limit applies):   up to $250,000.00
  • Emergency Assistance (Emergency Medical Transportation):   up to $250,000.00
  • Collision Damage Waiver (Not available to residents of OR or TX):   up to $25,000.00
  • ADDITIONAL: post event loss of life or limb, up to 180 days after the accident:   up to $100,000.00

Comparing Different Policies Another Web site that has become very popular with cruisers is called "Insure my Trip". There you can enter your trip details and instantly get quotes from dozens of insurance providers. The site lets you compare them side by side. When I ran a query based on the example above, I noticed that many policies are very similar, but can vary in price by as much as $100 per couple. I compared three of the leading providers side-by-side: Access America ($141 per couple), CSA ($185.36 per couple) and Travel Guard ($212 per couple). The coverage was very similar in most cases; but two big differences stood out; both extremely important to certain people: pre-existing medical conditions and provider default.

(still looking for that sexy picture?)

Even better than using the web site's online quote and comparison engine, however, is the fact that InsureMyTrip has highly trained travel insurance experts available seven days a week (9:00 - 9:00 weekdays, 9:00 - 5:00 weekends ET) you can call, email or chat online with. There is simply too much information for a novice to compare every possible plan. I recommend you consult the people who have the answers ready. The experts at InsureMyTrip can make recommendations for you without you having to consult every company in the online quote system. So, I suggest that you just call the company instead of buying online.

Pre-existing Medical Conditions and Med-Evac Coverage of any pre-existing condition varies among different vendors, so if this is an issue for you, be sure to ask. For example, the more expensive Travel Guard offered pre-existing condition coverage if you buy a policy within 14 days of making your initial trip deposit, with a pre-existing condition window of 120 days. (The window is the time period since the last "event" involving your condition.) The least expensive vendor in my limited comparison, Access America, gives you pre-existing medical condition coverage is you buy within 14 days, and has only a 60-day window. From the mid-priced CSA, pre-existing can be purchased at anytime up until you make your final payment (the quote system on Insure My Trip gave conflicting information for CSA regarding pre-existing condition waiver).

What qualifies as a pre-existing condition? If you take medication for high blood pressure, for example, it is not considered a pre-existing medical condition if your medication is controlled and you see a doctor for routine checkups. It would only be considered a pre-existing condition if your doctor altered your medication, had a test done, requested that a test be done, or changed your diagnosis within the "window" period.

Medical evacuation, as we discussed before, is the process of getting a sick or injured traveler back to hospital facilities in their own cities of residence. This can extremely expensive, involving helicopters, medical equipment, jets, and all the trained personnel to assist you. Coverage varies by policy from nothing to up to $500,000. Peter Evans, of InsureMyTrip.com also tells me that this is more complicated, however. A standard med-evac policy will get you to the nearest "best care facility" - whether that is in Istanbul or Beijing. If you want further insurance to pay for your trip all the way home, then you need a plan like Med-Jet, which will take you from any hospital (that best care facility) back to your home town or city of choice. Med-Jet is a separate policy, not included as an option with any travel insurance.

Policies obtained from cruise lines generally do not cover pre-existing conditions, but if you have to cancel due to health reasons they may provide a future cruise credit of about 75%. This varies by cruise line and should be verified with your travel agent or on the cruise line web site.

What Else is Covered? Sometimes a trip cancellation or interruption is not your fault -- it happens because your travel provider goes belly-up. With major lines like Carnival, Royal Caribbean, NCL or any of their subsidiaries, that is not likely to happen. But a number of smaller cruise lines have disappeared over the years.

Known as "provider default," this coverage varies a lot from different insurers, and is only provided if you buy your insurance within 14 days of your initial deposit. (Note: Insurance purchased directly from your cruise line will not cover you if the line shuts down.) Access America offered it, as did TravelGuard; CSA did not. Jerry Watson at Vacation Protection Services was proud when his company became one of the first to offer coverage in the case of terrorist actions. Now, most policies also offer that.

What is NOT Covered? While terrorist acts interrupting your trip are covered, strangely enough, the act or threat of war is not covered in most cases. So if you were planning a cruise to Iraq in 2002, you were out of luck. More likely is the financial default (sometimes even involving criminal actions) of a travel agent you booked through. This is not covered, so when you buy a cruise, make sure the agent charges your credit card to the cruise line, not to the agency (this is a rule of thumb we stress repeatedly at CruiseMates). Another thing not covered is an airline ticket "purchased" with frequent flier miles. As far as the insurance carrier is concerned, you didn't pay anything for it.

How about "Cancel for Any Reason?" As we mentioned above, there are policies that will reimburse you simply because you changed your mind. But naturally there are caveats. Both TravelSafe and M.H. Ross offer "Cancel for Any Reason" options, but only if you purchase within 15 days of the trip deposit. The trip must be canceled two or more days prior to departure. Customers of these companies who "Cancel For Any Reason" get back 75 percent of their non-refundable trip cost.

Jerry Watson tells me the company Extraordinary Vacations Group, which calls itself EXVG (at www.exvg.com) will provide "Cancel for Any Reason" insurance that refunds 80 percent of your non-refundable cruise costs, or give you the option of a full cruise replacement at a later date. EXVG partners with all the major cruise lines and is part of the CruiseShoppes and Maupintour consortia, but it does appear to sell directly to the public. Ask your travel agent or your cruise line for this insurance by name, EXVG, or ask for the "Cancel for Any Reason" insurance plan.

The policies you buy from the cruise line will allow you to "cancel for any reason", but are not quite as generous the two mentioned above. Celebrity Cruises, for example, has a policy where if you cancel the cruise anywhere from 85 to 30 days ahead of the saildate, $100 is withheld from each passenger's refund as a penalty. If you cancel 29 to eight days ahead of the saildate, you are assessed a 50% penalty of the total price (cruise fare, port fees and taxes). Seven days or less, there is no refund at all.

The Wrap-up: So, asking me if you need travel insurance is like asking which came first, God or the universe? Should you ever have a problem and you don't have it, you are going to discover that you really did need it. So, you do need it, unless you didn't need it. Surprisingly, only 23% of travelers buy it, up from only 10% before 9/11, so a lot of people don't think they need it. But, I think a more logical question is "what is it worth to you to have that kind of peace of mind?" The answer is that a typical insurance policy costs five to eight percent of your total trip cost. Most policies are based on age and the cost of the trip based on a flat rate up to a 30-day voyage. Beyond that it is perdiem.

In any case, here are some of things you should know about travel insurance:

  • Your cruise travel insurance policy becomes effective at 12:01 the day after you purchase it.
  • In most cases, to get the full benefit of your policy, be SURE to purchase it within 14 days of making the initial deposit on your trip.
  • If something occurs during your trip, the insurance providers have 24-hour phone assistance; though they may not be able to help you immediately, always call to notify them you have a problem
  • Be prepared to solve the problem on your own and to be reimbursed by the insurance company later; keep your receipts.!
  • If you make a claim, expect to wait at least 14 days for processing before the insurer determines your compensation.
  • Expect to prove the reason for canceling a trip when citing medical or other reasons. These companies watch out for people who just changed their minds.
  • Insuremytrip.com also shows the industry ratings of all of the insurance carriers they provide quotes from. Buy from a reputable firm.

To read about ship doctors, visit our sister publication Sealetter

For those of you who have read this article patiently, despite the lack a sexy pictures, here is a little cheesecake for you.

Travel Safety Tips: Following are travel tips provided by CSA Insurance to help make the most of any vacation.

Whether you are traveling domestically or internationally, don't become a victim.

  • Do not carry large quantities of cash. Traveler's checks provide personal security and can be replaced.
  • Do not carry jewelry, wallets, or purses—wear a non-visible money belt. Transfer money from your money belt to pockets in your hotel room or in a bathroom.
  • Use your dress and appearance to blend in with the crowd. Take the time to research local dress codes, so as not to stand out.
  • Once you have arrived, keep your airline tickets in a separate, secure location from your passport. Also, remember your credit card number is on your airline ticket!
  • When traveling to a foreign country, always carry the required travel documents such as your passport, visa and tourist cards.
  • Be aware of local scam artists; always assume you are being watched.
  • Always inform others of your plans (family, consulate/embassy).
  • If mugged, cooperate with the assailant and voice your willingess to comply by saying, "You can have anything you want. Do you want me to get it or do you want to get it?" Avoid eye contact. Keep $25-$100 in your pocket as insurance. If hostile, offer additional money or possessions that the robber may have overlooked.
  • Keep your camera hidden until you are ready to use it. Use tote bags instead of camera bags. Do not hang your camera around your neck.
  • Avoid viewing maps in wide-open spaces.
  • Leave copies of all your information (credit cards, passport numbers, travelers checks, air tickets) with family or friends at home.
  • Avoid walking alone at night.
  • Do not take shortcuts. Stay on well-traveled streets.
  • Avoid demonstrations and acts of civil disobedience. Seek immediate shelter in hotels, restaurants, police stations, etc.
  • Withdraw money from ATMs only during daylight hours, preferably in banks or hotels.
  • Never leave valuables in plain view in your car. Lock items in your trunk before reaching your destination.

Make your hotel stay safer

  • Take hotel room keys with you to the pool or spa.
  • Find out in advance if there is on-site security.
  • Verify that window and door locks are secure.
  • Place valuables in a safe and get a receipt. Check the hotel's insurance liability limit.
  • Be careful of exits and elevators on your way to the room. If you are alone late at night, ask for an escort. Be suspicious of anyone loitering around the lobby.
  • Close your door tightly when entering or leaving your room.
  • Do not place ski or dive gear on the balcony.
  • List calls made, received, and their times, even unanswered calls.
  • Leave the radio, TV, and/or lights on, with the Do Not Disturb sign out.
  • Wedge the bathroom door while showering.
  • Be prepared in case of fire
    • Familiarize yourself with all general and emergency exits.
    • (If you can), extinguish fire or pull fire alarm.
    • Phone the fire department before calling the front desk.
    • Stay low, turn off air conditioning, get room key, check the door for heat with the back of your hand before opening.
    • Put wet towels under door and in vents to keep smoke out of your room.
    • Fill tub, sink and wastebaskets with water to re-wet towels and cool hot walls.
    • Remove curtains. Crack open window.
    • Put a wet towel over mouth and nose.


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